KUCHING: Japan, which has drastically cut imports of Malaysian plywood in the past two years due to sluggish sales, has stepped up buy orders of hardwood plywood due to a strong demand for reconstruction works after the recent devastating Hagibis typhoon.
Japanese importers have started increasing the sales prices of imported tropical plywood as supply mills in Malaysia and Indonesia continue to raise their export prices and reduce production output due to log shortage.
“The bottom feeling is spreading in the market. The prices of concrete forming panel and structural hardwood plywood are climbing with busy demand for storm rehabilitation works, ” according to the Japan Lumber Reports (JLR).
The JLR, a trade journal published every two weeks, is reproduced by the International Tropical Timber Organisation (ITTO) Tropical Timber Market report.
“The supplying plywood mills in Malaysia and Indonesia have kept pushing the export prices and at the same time some (plywood) items in Japan are short. As such the prices are gradually climbing but not fast enough to catch up with the fast pace of suppliers’ price hike, ” said JLR.
Hagibis was reportedly the biggest storm in decades which hit Japan three months ago. The devastating typhoon killed at least 69 people and left trails of environmental damages, including to properties, public amenities and infrastructure.
To fund storm rehabilitation works, the Japanese cabinet has approved an extra budget totalling 4.47 trillion yen (US$40.8bil) to support reconstruction efforts and prepare mitigation measures for similar catastrophic events in the future.
JLR, which has predicted a rise in hardwood plywood imports for post-Hagibis reconstruction activities, has earlier blamed the wide-gap in Malaysia’s export prices and market prices in Japan for the sluggish sales.
Malaysian plywood manufacturers have lost their market share in Japan, the key export market, due to stiff competition from Indonesian suppliers and the sharp increase in demand and production of softwood plywood in Japan.
Statistics from Sarawak Timber Industry Development Corp (STIDC) reveal that Sarawak plywood export volume fell to about 1.12 million cubic metres worth RM2.26bil (FOB) in 2019 from 1.43 million cubic metres (RM3.03bil) in 2018 and 1.74 million cubic metres (RM3.27bil) in 2017.
In 2019, Japan, however, maintained its position as the top buyer of Sarawak plywood, absorbing 733,051 cubic metres (RM1.59bil) or more than 70% of the state’s total plywood exports earnings.
Sarawak’s log export volume dropped to 1.29 million cubic metres worth RM722.2mil in 2019 against 1.42 million cubic metres valued at RM773mil in 2018.
According to JLR, demand for domestic softwood plywood in Japan is robust and the supply is getting tight in some areas due to shortage of trucks to transport the goods.
“Movement of domestic softwood plywood is active all over Japan. On top of orders from pre-cutting plants, wholesale channels are procuring materials for typhoon’s and flood damages in eastern Japan.
“Orders for renovation and non-residential buildings are also active. Domestic plywood manufacturers have been running with full capacity to catch up busy demand and the monthly shipment surpasses production.
“With low inventories, some plywood mills started restricting to take orders from new buyers and additional volume even for regular customers, ” it added.
Meanwhile the ITTO report said the United States’ imports of hardwood flooring from Malaysia jumped by 23% in November 2019 and rose by 37% for year-to-date (YTD) as its imports from China fell 8% in November and a whopping 65% for the first 11 months as compared to the same period in 2018.
The United States’ imports of hardwood moulding from Malaysia shot up by 50% in November 2019 and increased by 12% YTD to make up for the sharp decline in imports from Brazil and China (down by 55% and 33% in November and 50% and 45% YTD).
In 2019, United States was the top importer of Sarawak’s flooring/laminated board, absorbing 6,816 cubic metres worth RM30.9mil out of the state’s total export value of RM42.3mil. Sarawak also exported RM12.7mil worth of panel products to the United States last year.
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